When an Economy Is Temporarily Operating at an Output That

question 188

Multiple Choice

When an economy is temporarily operating at an output that is beyond its full-employment rate,

• A) excess supply in resource markets will eventually lead to lower resource prices, which will decrease costs and direct the economy toward full employment.
• B) excess demand in resource markets will lead to higher resource prices, which will increase costs and direct the economy toward full employment.
• C) lower wages and prices will quickly restore full employment.
• D) only restrictive fiscal policy will direct the economy back to full employment.

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Definitions:

Fees Earned

Revenue generated from professional services provided, often used in accounting for law firms, consulting businesses, and other service providers.

Cash

Money in the form of bills or coins, immediately available for transactions or expenditure.

Accounts Receivable

Accounts receivable from clients for merchandise or services supplied but payment not received.

Unearned Revenue

Money received by a company for goods or services yet to be provided, recorded as a liability on the balance sheet until earned.